The Obama administration thinks it knows best how to run health care, the banks, and the auto industry, so why not post-secondary education? And the best way to do so in Obamaland is to limit choice, which is exactly what the Department of Education has proposed in new rules affecting student loans.
The ostensible reason for the new "gainful employment" regulations is to curtail predatory practices by fly-by-night, for-profit trade schools that promise lucrative careers but deliver shoddy training. But the way in which the administration is going about solving the problem will cause more harm than good.
In hearings last month, the department heard from both opponents and proponents of the new rules, which would limit access to federally guaranteed loans by institutions whose graduates would end up with higher debts relative to earnings, as calculated by the Department of Education. Under the plan, students would not be allowed to use federal student loans to attend programs whose cost the administration calculates will require more than 8 percent of their estimated future yearly income to repay. And the department would limit eligibility for students to use federal loans at for-profit schools if 65 percent of the former students at those schools had failed to repay the loans in what the government considered a timely manner.
It is the kind of micro-managing and social engineering that the administration favors when it comes to problem-solving in every arena. Whatever the issue, the Obama-ites believe they know better than everyone else what is good for people. In this instance, the group most affected will be non-traditional students, minorities, immigrants and older, returning students who are already in the workforce. And the administration's target is for-profit schools, which the Ivy League graduates in the West Wing clearly disdain.
Many non-traditional students choose for-profit schools to learn a trade rather than attending liberal arts or even community colleges. These schools form an important niche in our post-secondary education system, one, ironically, that has become more important as secondary education has virtually eliminated vocational training as part of its mission. In a world in which we pretend that every high school student is college material, many kids graduate with no academic future and too few skills to earn a living at a trade.
The Obama administration recognizes the problem -- but their solution is to invest in nonprofit community colleges while at the same time demonizing for-profit schools that may offer a better alternative for many students. For-profit schools allow students to choose programs that focus on concrete job skills that also fit their lifestyle, offering online or evening courses or those that don't require attendance over a traditional school year to complete.
Students themselves should be the best judge of whether these programs are worth the investment -- not the federal government. But instead of applying market principles to test success or failure, the Obama administration proposes to gauge the programs' value by how quickly students repay their loans to the government.
The effect will be that many students who need federal loans in order to enroll in programs that will boost their skills and employability will now be restricted in the choices available to them. If a student wants to learn how to repair automobiles -- which, with the proliferation of computer-based systems in most new cars, requires far higher skill levels than in the past -- they'll be out of luck unless their local community college offers the course and at a convenient time. The same holds true for acquiring software and networking skills, learning dental hygiene or medical technology, much less becoming a chef. Indeed, few community colleges offer the breadth and scope of training available in for-profit schools.
The administration should be making it easier, not more difficult, for Americans to receive the training they need and want. And they should let Americans decide for themselves which programs best serve their needs. Instead, they're closing doors to opportunity for those students most in need.